NOTE 5 – LOAN PAYABLE

Related Party

During 2012, Christopher Maggiore, a significant shareholder, advanced the Company $15,000.  As of December 31, 2012 this amount was still unpaid.  During the six months ended June 30, 2013, Mr. Maggiore advanced the Company an additional $535,000.  As discussed in Note 6, this amount was reclassified as a loan payable to HEP Investments, LLC.  As of June 30, 2013, there was no balance due to Mr. Maggiore.

Others

During 2012, the Venture Group loaned the Company $57,000.  Through June 30, 2013, an additional  $25,000 was loaned to the Company.  This money was related to the overall financing of $500,000 as further discussed in Note 6.  As of June 30, 2013, there was still a balance due to the Venture Group of $82,000.

As of December 31, 2012, HEP Investments had loaned the Company $186,592, as part of its overall funding commitment of $2,000,000. During the six months ended June 30, 2013, HEP Investments, LLC loaned the Company an additional $1,521,000 (see Note 6 – Convertible Debt). Pursuant to the terms of our agreement with HEP Investments, $1,500,000 of these loans were converted to Convertible Secured Promissory Notes, leaving a remaining balance of $207,592 in loans payable – others as of June 30, 2013.